MGT 2100 Chapter 5

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generation of alternative courses of action

In the 1960s, Coca-Cola executives in Atlanta learned there was a bottler in the Colombian jungle that was bottling pirated Coke in dumped bottles. Coke decided in the ____ stage of the rational decision-making process that it had to either bring some sort of legal action against the unauthorized bottler, ignore it, or buy it.

highly cohesive groups where there is a great deal of pressure to agree with each other

Groupthink occurs in ____.

maintain flexibility in planning

The last step in effective planning is to ____.

assumptions

The use of ____ in planning produces a false sense of certainty and is often cited as one of the major pitfalls of planning.

middle managers

Who is responsible for the creation of tactical plans?

Options-based planning

____ can help organizations to maintain flexibility as they plan.

Delphi technique

The ____ is a decision-making method in which a panel of experts responds to questions and to each other until an agreement is reached on how a specific issue should be handled.

Operational

____ plans direct the behavior, efforts, and priorities of operative employees for periods ranging from one to six months.

Planning gives direction to managers and employees.

Krispy Kreme is a relatively small doughnut seller. It has only 295 stores while Dunkin Donuts has over 3,600 outlets in the United States and Canada. In spite of its size, Krispy Kreme has been described by many as "the hottest brand in America." The company's success in an environment which has made success difficult for many food operations is due in large part to the long-term vision of its top management and its establishment and achievement of S.M.A.R.T. goals. The company originated in Winston-Salem, North Carolina, in the mid-1930s when Vernon Rudolph bought a secret recipe for yeast doughnuts from a French pastry cook. Rudolph ran the company until he died in 1973 without naming a successor, which caused the company problems for the next decade.

<b>Refer to Krispy Kreme. How does Krispy Kreme benefit from planning?</b>

distal

Krispy Kreme is a relatively small doughnut seller. It has only 295 stores while Dunkin Donuts has over 3,600 outlets in the United States and Canada. In spite of its size, Krispy Kreme has been described by many as "the hottest brand in America." The company's success in an environment which has made success difficult for many food operations is due in large part to the long-term vision of its top management and its establishment and achievement of S.M.A.R.T. goals. The company originated in Winston-Salem, North Carolina, in the mid-1930s when Vernon Rudolph bought a secret recipe for yeast doughnuts from a French pastry cook. Rudolph ran the company until he died in 1973 without naming a successor, which caused the company problems for the next decade.

Refer to Krispy Kreme. The company's goal to never reveal its secret recipe to anyone outside the company is an example of a(n) ____ goal.

strategic plans

Top management is responsible for developing long-term ____ that make clear how the company will serve customers and position itself against competitors in the next two to five years.

options-based planning

The basic purpose of ____ planning is to leave commitments open by maintaining slack resources.

Procedures

____ are standing plans that indicate the specific steps that should be taken in response to a particular event.

rules and regulations

Which of the following is the most specific type of standing plan? - A.)Policies B.)Procedures C.) Rules and Regulations

single-use plan

What type of planning would be used to create the festivities necessary to celebrate the 100-year anniversary of a furniture manufacturer?

A(n) ____ lists the specific steps, people, resources, and time period for accomplishing a goal.

identified its problem as the fact that demand for its beer exceeds its ability to supply it

With beer sales dropping around the world, you should be ecstatic that sales of Yuengling (pronounced Ying-Ling) beer are up 225 percent in the last six years. But as you walk through the caves and tunnels of Yuengling's Eagle Brewery, carved into Sharp Mountain in 1831 to maintain a perfect 50-degree temperature for storing beer, you see not only the history of America's oldest brewery everywhere you turn, but also chipped paint, rusting pipes, and an aging plant that can't keep up with the growing demand for Yuengling beer. So far, thanks to hard work, dedicated workers, and some luck, you've doubled your production capacity from 250,000 to 500,000 barrels of beer a year, but if you push for more, the old brewery will break. Yet with sales up so dramatically, the company faces a problem. Says CEO and owner Dick Yuengling, "We are sold out of beer. We run the risk of losing our customer base because we don't have any product on the shelves." Shortages are so bad that the advertisingbudget has been cut from $3 to $2 a barrel. Yuengling explains, "You can't fuel the fire when we can't get them beer anyway." With production stuck at 500,000 barrels a year, Yuengling beer has become harder to find even as it has become more popular. Sales representative Diane Adams said, "It was a little hairy. People were up in arms." So, rather than sacrifice sales in its home market of Pennsylvania, where Yuengling has its largest market share (10 percent), the company has temporarily stopped shipping beer to distributors in Maine, Massachusetts, and Rhode Island. Since that strategy won't help Yuengling grow outside Pennsylvania, you still face the question of how to permanently increase beer production to meet the growing demand. You've identified five options. The first is to add new storage and finishing tanks to Eagle Brewery to increase production capacity by 10 percent to 550,000 barrels a year. Though doable, this is only a short-term solution. Second, you could outsource production to another company. This would be more cost-effective, but would Yuengling beer produced in non-Yuengling factories taste different? For a specialty beer, this could be a substantial risk. Still, outsourcing would be affordable, and Yuengling has done it before, outsourcing production of its Black and Tan beer to Pabst Blue Ribbon's brewery in Lehigh, Pennsylvania, until Pabst closed that facility four years ago. The third option is to buy another brewery, but there aren't many for sale and those that are would be expensive and require significant upgrades. For example, it would cost $13 million to buy and $5 million to fix Stroh's 1.5 million-barrel brewery in Tampa, Florida, which is far from Yuengling's northeastern markets. A fourth option is to build a new factory capable of producing 1.2 million barrels per year, but that would cost $50 million and take three years. The fifth and final option is simply to do nothing. The company is already very profitable, has low overhead costs, and is very efficient. In other words, by doing nothing the company could still make a lot of money without incurring the risks inherent in the other options. And risk is a real consideration because everyone in the company remembers that Yuengling was losing money just a few years ago.

Refer to Yuengling. In the first stage of the planning process for Yuengling, it should have ____.

tactical

A department store is experiencing greater than usual losses due to theft and management wants it stopped. Middle management decided to hire a security company to study the problem and develop the best plan for dealing with it. Middle management have implemented a(n) ____ plan.